AGM and Interim Management Statement

RNS Number : 9687F

Morgan Sindall Group PLC

05 May 2011

 



Morgan Sindall Group plc

5 May 2011

AGM aND INTERIM MANAGEMENT STATEMENT

Ahead of today's Annual General Meeting ("AGM"), to be held at RBS, 250 Bishopsgate, London EC2M 4AA at 12pm, Morgan Sindall Group plc ("the Group") announces its Interim Management Statement for the period from 1 January 2011 to date.

The Group has made a positive start to the year and is on track to meet its expectations for this year. Our cash position remains strong and the Group's forward order book has increased slightly since the start of the year.

Construction & Infrastructure is trading in line with expectations and its order book has increased since the start of the year, to be level with the corresponding period last year.  Significant wins in the period include the £50m Pudding Mill Lane Crossrail contract as well as a place on two lots of the £500m Smarte East Alliance framework. While we anticipate the market will remain competitive, the division continues to pursue a number of significant opportunities particularly in the power distribution, airports and rail sectors where growth is being driven by investment in economic infrastructure.

Affordable Housing has seen a slight improvement in market conditions for open market housing compared with the second half of 2010 driven by improved sales pace with house prices remaining steady. The division has been successful in the period securing a number of new build social housing contracts including a £25m sustainable housing contract for Hackney Council and a place on two major frameworks (valued at up to £210m in total) in Scotland for Port of Leith and West of Scotland housing associations. Planned and response maintenance contracts are performing in line with expectations and there is a reasonable pipeline of opportunities in this sector of the market.  Cash collected on the WIP and debts acquired from the Connaught administrators now stands at £16m and we remain on track to recover our target collection of £28m during the course of 2012. There has been no significant change to the division's overall outlook with the forward order book increasing slightly since the start of the year.

Fit Out continues to win work in a market that remains highly competitive with continued downward pressure on margins. The division's forward order book is slightly below the level at the start of the year and the corresponding period last year.

Urban Regeneration continues to progress the next phases of development on a number of its key schemes. It has traded in line with expectations since the start of the year and we continue to expect the division to make progress this year although, due to the anticipated timing of transactions, operating profits are expected to be weighted more towards the second half. With the commercial occupier market still relatively quiet the emphasis this year will be to capitalise on the Group's strong cash position to secure new long-term opportunities that will strengthen the development portfolio and future pipeline.

The Investments division has signed contracts for the Bournemouth Town Centre Vision LABV regeneration scheme in joint venture with Bournemouth Borough Council. The scheme, which will deliver a range of mixed-use and residential development across 17 sites in the town, is expected to have a development value of between £350m and £500m over 20 years. It is also expected to provide significant opportunities for the Group's Construction & Infrastructure and Affordable Housing divisions.

Overall, the Group's forward order book has increased since the start of the year from £3.6bn to £3.8bn and Group's development pipeline has increased by £350m to £1.8bn. The financial position of the Group remains strong, with average cash for the year to date increasing slightly over the level achieved for the comparable period in 2010 and is above the average level expected for the year. There have been no significant changes to the Group's financial position since the publication of the Annual Report and Accounts for the year ended 31 December 2010.

In summary, we have made a positive start to 2011. With the strategic progress made last year, our enhanced divisional capabilities and broad sector spread we remain well positioned to make the most of opportunities in growing sectors of our markets and are well placed to face the challenges that lie ahead.

- Ends -

Morgan Sindall Group plc                                       Tel: [phone]

Paul Smith, Chief Executive

David Mulligan, Finance Director

Blythe Weigh Communications                               Tel: [phone]

Paul Weigh                                                                 Mobile: [phone]

Tim Blythe                                                                   Mobile: [phone]

Notes to Editors:

Morgan Sindall Group plc is a leading UK construction and regeneration group operating through five divisions of construction and infrastructure, affordable housing, fit out, urban regeneration and investments.

 

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